Revenue Regulations No. 8-2018
Revenue Regulations (RR) No. 8-2018 provides the implementing guidelines for the income tax provisions under the Tax Reform for Acceleration and Inclusion (TRAIN) Law in the Philippines. Here are the key points relevant to doctors:
Graduated Income Tax Rates
For doctors who are employed or have mixed income (both employed and self-employed), the graduated income tax rates apply to their taxable income. Under the TRAIN law, the rates range from 0% to 35%, with higher income brackets having higher tax rates.
8% Flat Rate Option
Self-employed individuals and professionals, including doctors, can choose to be taxed at a flat rate of 8% on their gross sales or gross receipts in excess of PHP 250,000, in lieu of the graduated income tax rates. This option is only available if their gross sales or receipts do not exceed PHP 3 million.
Filing and Payment
Doctors must file and pay their income taxes regularly as indicated in the Certificate of Registration. If there are tax payable, payments should also be made along with the tax return.
Doctors paying taxes under the Graduated Income Tax Rate can claim itemized deductions or the optional standard deduction (OSD) when computing their taxable income. The OSD is 40% of the gross sales or gross receipts for self-employed individuals and professionals.
Employed doctors will have withholding tax on compensation deducted from their salaries by their employers. Self-employed doctors or those with mixed income may also be subject to the expanded withholding tax (EWT) or creditable withholding tax, which is withheld by the payer and credited against their annual income tax liability.